CODI Compass Group Diversified

Matthew Berkowitz IR
Elias Sabo CEO & Director
Pat Maciariello COO
Ryan Faulkingham EVP, CFO & Co-Compliance Officer
Kyle Joseph Jefferies
Lawrence Solow CJS Securities
Robert Todd Raymond James
Call transcript
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Good afternoon, and welcome to the Compass Diversified Holdings' First Quarter 2020 Conference Call. Today's call is being recorded. [Operator Instructions]

At this time, I would like to turn the conference over to Matt Berkowitz of the IGB Group for introductions and the reading of the safe harbor statement. Please go ahead, sir.

Matthew Berkowitz

to Holdings welcome Conference Quarter and Call. you, Compass First Diversified XXXX Thank today CODI's Group Elias CODI's the are Representing company Sabo, Pat COO CFO; Maciariello, CEO; of Compass management. and Faulkingham, Ryan

would like release, company's reconciliations website on press financial are Before we at the begin, to out Investor QX including financial that non-GAAP and the the at point tables available XXXX the measure section I Relations

includes EBITDA the reconciliations its filed XX-Q the market Form to discussed closed, company's in after this to that which following net non-GAAP The Please company also the reconciled refer financial on of SEC with EBITDA, measures in financial note today as filings. discussions income adjusted call. references the to

Holdings Company. as CODI Throughout we this call, or Diversified will Compass refer the to

harbor to Now read safe following the statement. me allow

identify or certain as call, this with subsidiaries, to could the conference forward-looking During and expects, inherent future Certain projected basis these uncertainties performance may those conditions. believes, words to subject results to and forward-looking projects in expressions regard we its factors to the statements, from statements statements These actual on CODI future a predicting results are of intended similar future such in differ material including statements. forward-looking statements. make cause are and forward-looking

as enumerated filings. XXXX And and XX, Exchange Securities the the some the the risk ended these as factors March filed with in in Form Commission of as are factor XX-K other discussion in year well for SEC

companies. required law, obligation update statements currently a a any impact Covid-XX or has whether no the or domestic significant as to of impacted environment information, and by subsidiary by our revise otherwise. particular, new global future the undertakes result publicly forward-looking is events In economic as CODI on pandemic Except

to call like Sabo. the to this turn would over Elias I time, At

Elias Sabo

to first Thank afternoon. you conference welcome quarter for and time earnings all our Good your call.

at The impact acknowledge moment to just our has pandemic beginning of world our been environment. understand alignment will additional to current long-term further addition to about taken this much the providing the time; describe can take for only widespread to are expecting as on the quarter. success. as we I'd the near-term unprecedented we like Before position are we've in a around And company what the Covid-XX I for the results, to discussing I we and what steps Today, seeing business. are second the effect detail

the remains importantly, First most safety priority. our top and of our well-being employees and

procedures at protect by checking We temperature implemented the social best manager our to have rigorous increasing not, our working CDC. practices as when other remotely and and of when employees at both such distancing protocols, subsidiary companies as cleansing strict level the it's measures, suggested possible,

they and that We will continue all to feel to employees steps protect our necessary safe ensure and supported. help take

similar orders of on month. April, some last and of XX% impact in are the and place which of over economic shelter dropped US most Asian Covid-XX mid-March business. global under With form markets significantly dramatically beginning and the continuing to through of the and suddenly European economy. dropped Turning population outlook impacted US have under orders

orders term our result, our the subsidiaries managed business beginning and a always in we the full the as accelerating have drop certain the for in unexpected. in mid-March effect in As products and experienced shelter a April place for CODI, hold. long demand of At took

factor be a last hands-on have dreams forward. distinguishing approach may current our situation been defensively move and and will we beyond continue positioned us stand year, to the disciplined as wildest have While our

maximize include our reduce travel We've controllable eliminate spending. to months worked subsidiaries. discretionary non-essential cash at management and with reduce tirelessly moves few These costs, reduce and teams over to actions our the short-term last labor costs flow

the Covid-XX growth we initiatives is through are measures these us. to have our We base in that place plans are pandemic hopeful crisis behind our the restore and as and once way temporary work employee we

proud We companies as important producing to for success the of subsidiary cotton hospitals work as Sterno are mask healthcare recognize well all hand its is how first have congratulate our so sanitizers supporting responded responders, providers. X.XX Covid-XX on done and and and local

shutdown in the the sudden Despite of we exceeded financial QX. economy expectations global our March, in

revenues, comparable generated adjusted $XXX first generated million the the approximately subsidiary of $XX.X million from of cash and EBITDA flow $XX.X we last prior to year's year's results from exceeding During matching our down reinvestment, available Ryan CAD detail quarter, in XXXX CAD $XX.X period. first of for million We down discuss period comparable of X.X% we X.X financial which refer and will greater shortly. quarter of million. year's distribution and expectation as during our prior the

also quarter, Marucci April the we of and and the we our of on acquisition During softball which closed is Marucci announced and Sports, baseball equipment designer premium leading XXth. apparel. manufacturer

and Our access advantage a moving forward were on fuelled when coveted with consumer sets business others permanent time clear funding. a at platform swing capital volatility financial this markets a to was unable investment wild products pandemic many in competitive and sourcing

come. to into looking for Ainsworth, with in working the family Chief are positioning Kurt Marucci Compass to welcome Marucci' success the excited Officer company Executive forward We especially the years and in are to

internationally. league Victus. market. aspirational the subsidiary market take entering all Factory share Over brand an expanding like top respective strong opportunities prior has sister of product players Much in or equipment performers Marucci We XXX, to in by categories its see continuing our created domestic adjacent brand by growth its baseball into Marucci big half use to Fox appealing and and

by encouraged we prospects. Marucci's long-term While and are excited

by performance League impacted Major all and financial large-scale including its Baseball events be sporting U adversely suspension to of sports. expect the in We XXXX

possesses will period in second million anticipated breakeven in in reduced EBITDA our and value business attributes in financial quarter. will in believe XXXX losses the estimated the market growth consumer of Marucci losses that term. the result Marucci and expected ownership quarter, roughly performance that for long with EBITDA and the the be second fit Despite creation per perfect shareholder anticipate in a our for We in the we XXXX $X is month roughly share

large impacted stemming to remain of allow be from effectively positioned we broadly market dislocation from the well segments to time results on and conditions. us taking quarter emerge operate unprecedented Covid-XX, response to economy are halt by abrupt to undoubtedly a actions stronger in will believe global the even focused we the second will that of decisive While these

Most has growth. gatherings industrial businesses dramatic earning the as drop out industrial our large well believe catered prohibited Our potentially as are We basis on in consumer subsidiary in of group positioning a all most will a environment Sterno's our dramatic are positive largely core Liberty global this GDP, to perform however, continues Velocity well April. consolidated further. from businesses catering companies demand reduction positioning. are that them challenges. considering their in and of believe far our some accelerated these performing faced flow the line cash brands companies branded to Sterno seen of produce throughout trends United audience to thus crisis pleased for and consumer coming in benefit will readiness the larger appeal this Further, in and of XXX, events and a Pat we discuss has States.

we economic and XXXX, EBITDA are guidance of to consolidated Turning to compared of our currently of reduction pro uncertainty, Marucci. $XX current the million withdrawing a $XX to subsidiary the our adjusted of for for XX% second excluding guidance. anticipate light between however, of second we million, In forma XXXX, XX% quarter quarter XXXX

to fee decided management waive in the for second Due manager and the XX% XX% of waive quarter cash reduction in the its to of its has the agree to payment to quarter. QX our of Board earnings has expectations, second due Directors

the very it was compensation and manager comparatively levels appropriate our and liquidity fully align our are Although Compass holding shareholders. to reduce has felt up to strong ourselves earnings with Board well, our

entitled Additionally, it defer the incentive receive any for decided payment anniversary XXXX. five-year be of to payment any all under to manager has would

expect moves cash some XXXX save offset $XX We challenges flow in ahead. company and the to the of in these approximately million

emphasize call the we strategic year. Before a due want I last moves turning strong over made position to to we are the Pat, liquidity in to that

As many and Marucci respectively. acquisition XXXX February not prior platform September or we any add-on to of had new you know, since consummated XXXX

and by that cash. our were often capital on returns in only and term preferred divested have economic term two we million valuations remain stock abundance issued long loan businesses and short prices and allowed the very went earn us were high at being and balance in These our all step resulted average historically also would cost in very strategic in levels With this that of sheet $XXX balance of a capital paid debt appropriate return. equity we and below was risk one that assets our the we revolver and term, an of the capital. and indebtedness it potential decisions of further we mind, order asset were our prices deployment, debt fuelled position We knew we ceded sit defensively to but high to for cycle weighted repay while at disciplined we attractive to that company the not in and felt under in

accumulating the only companies, meet annually allocation management like to B year starting announced Marucci and preferred do common outstanding declaring to waived our These last interest position last decisions Not $XX assets during that served were to shares. the million well. believe second move our C we we Series our ourselves of shareholders the approximately on of business year, needs and of in able others our voluntarily capital and moves needs a has by manager much we but subsidiary shares aggressively A, were fees in acquire recall an liquidity we will with the the distribution you As when aligned this our meet today. quarter also in us our crisis have midst defensively

to call With subsidiary Pat the first that, now company's performance our detail turn the over to quarter. will in additional I on provide

Pat Maciariello

begin Elias. I'll our with industrial businesses. Thanks niche

in each declines in first quarter performance. March year's. of sequentially with Circuits XXXX during Advanced first in Circuits decreased comparable roughly month XXXX line period. XXXX, in % last down with Advanced April, year by the the Advanced QX, and far declined the improved over EBITDA in is roughly by XXXX. was Circuits ago meeting Thus the quarter quarter EBITDA For revenues XX.X% from X% performing

Foam period. down initiatives. input ago cost the Fabricators Foam QX, and from cost is X% Fabricators was year containment other lower EBITDA from benefiting XXXX in

are input and reduction Fabricators and costs pharmaceutical mitigate Foam far seeing Thus customers, are the significantly for on insulated revenue delivery in from a seen of addition, Foam result are Fabricators earnings. have April effect food a measures containment others. in somewhat as among demand lower coolers to appliance cost increased however, In its which demand expected shipments using reduced

in bookings Arnold back the year ship the increased QX, scheduled from period. Magnetics EBITDA were XXXX XXXX benefited was up XXXX. Arnold to X% in in half of ago from that

expect and to decline We XXXX the started benefit second to was end quarter, in year expectations in in Elias however, X XX% catering XXXX performing book-to-bill these EBITDA was its down bookings fallen QX, has January March. the fell Sterno continue demand to Sterno quarter. February of The of in at the the however, its Group's and ago below first ratio of the core February, from end products dramatically ahead period. at first mentioned as Arnold

We year. catering weak demand of products weak quarter at the related remainder in the least experience for the business second performance expect to extremely the and and

cuts As the right-size this a cost result, unprecedented order time. we've business to during in made

Historically, Sterno's which for the the substantially experienced the our of essentially it essential the wax improved sold roughly on performance outperformed Sterno we performing expect weakness flat in April. oils, or of represented have be is consumer in its reduce slightly of Home, XX% and We actions year-over-year business to consumer home are fixed a basis. in expectations. line retailers Despite cost Group Sterno of reduced also division big-box took of portion and products as division and business to Sterno's well is have EBITDA early

however food roughly XXXX. our the breakeven expect for business to We historically of has the remainder which of EBITDA be service been XX%

Now consumer businesses. turning branded to our

of over respectively For of QX, increased the X.X% footprint internationally. a XXXX XX% XXXX. in X.X% EBITDA year quarter revenues in revenues and the comparable down has majority by Ergobagy quarter period. global the Ergobagy was EBITDA a ago first XXXX, and and its from derives

for customers lower strong negative in Therefore, it a significant we April digital reduced a economic remain has retail strong is experienced conditions. of presence to in all accelerated to their These markets rates of Ergobagy Ergobagy we and customers offset to some Ergobagy by impacted while and doors. in significantly as global operating tied historically reopen have So experience and its declines. and Domestically, results growing QX. less brick-and-mortar demand in demand European Ergobagy markets, the in expect trends demand as rebound believe closed. poised later wholesale birth Asian been has brick-and-mortar XXXX and

QX, demand given the Despite store first Liberty's year a stores products up large distribution current in Liberty continues solid in level of secured performance. outperform Liberty to expected farm with of high the mid-XXXX in of many ago as closed EBITDA experience the customer the was however, is XX% benefiting [flee] impacting XXXX and closures, and demand negatively the half and-mortars period. in from remain of XXXX. last brick- that to uncertainty, April, Liberty year. QX safe

than the as in was QX, demand from EBITDA expected accelerated performance March. period. product XXXX XX% Outdoor's down airgun ago was Velocity year for better This in

expected side. headwinds restructuring worked business of proceeding extraordinarily restructuring. the as [Indiscernible] his most performing of on management be very The through in airgun team business restructuring result and financial planned the a Kelly Tom as mid-XXXX on we under Grindle reminder, efforts positive to to McGann and As well, a and is continue are leadership the this XXXX of a transferred

closed QX, ahead customers. of and XX% X.XX's public. workers, to remained consumer closed the with pandemic, however, X.XX those X.XX XXXX its responders our employees,X.XX expectations. products Starting responders access retail first and protect essential were stores our year most to stores store retail this fighting open to to general up was integral to EBITDA first late so ago in the to period. X.XX's in its perform of from continue March,

year, As up far experienced in channel brand. have X.XX is retail digits period. and ago revenue mid-single year and is however, the a it stores as numbers from its are digitally a a basis direct products X.XX impacted, month-to-month channels focused XXX% for prior strength X.XX April result, up over a Further lifestyle of demonstrating sales significantly at an retail demand in brand its on site, of been a the increased thus consumer which e-commerce

are expected far has its accelerate it experiences Despite high its to to temporary trending growth revenues down cut initiatives in in improvement from the direct year. that enhance prior efforts. align digits the consolidated however, in single continue demand X.XX will the certain digital moved and the cost X.XX channels, April rapidly to in invest thus consumer drop,

X.XX's stronger consumers to crisis preparedness X.XX emerge is mindset positioned ready. the always continue to to We mission that this believe as from than with statement be adopt consistent before

We to be continue to believe X.XX will transformational the entirety of Compass.

comments turn now his call to over will I that, the results. With to Ryan our financial and add

Ryan Faulkingham

Thank you, Pat.

Last CODI's $XX.XX IPO a X.X%. our representing of we discuss approximately distributions distribution yield cumulative This per $X.XX in of want distribution, of share to common our on I we paid the to of since paid Including a have approximately current financial I this the were XXX% price. shareholders. XXXX distributions share XXXX, reflects recently per IPO. Before quarter XXrd, that first highlight shareholders results for week cash paid April consolidated first quarter

In A on all the C $X.XX of share excluding Series X.XX XXXX preferred $X.XX on to period and approximately our preferred and XXth, including per but up XXth, April per shares we B addition, and Series preferred share January our paid X.XX Series approximately three distributions covered distributions cash XXXX. shares, from today

consolidated prior subsidiary the to as quarter for result a by the filed company a our comments SEC for year-over-year are challenging our for consumer Form X.X% branded the earlier other XXXX. discussed. results previously at year the that will the March consolidated pandemic. $XXX.X the On revenue quarter financial Covid-XX in I our subsidiaries, since of limit in with overall down to largely and my Moving growth basis, period. our decrease This Strong for sales ended offset conditions declines was to compared XXXX XX-Q XXst, economic Liberty March today. ended the the X.XX reflects $XXX.X million million, results XXst, detailed results was individual businesses was

net with income in of $XX.X the quarter Consolidated first included million. gain prior period. year prior ended XXXX net flat for million million Consolidated essentially XXst, March sale the for quarter March XXXX connection the year's ended the quarter for Harvest. $XXX.X CAD $XXX.X recorded was from a Manitoba $X.X the was XXst, was income and million

our with slightly CapEx Our our EBITDA and above with the line result was as of prior roughly our outperformance CAD reducing the management expectations, cash spend taken a down March quarter of was year in teams primary actions expectations conditions. the direct during economic in driver from subsidiary taxes the by our CAD

was to The management distributions of result C interest flow and in of performance consolidated divestitures existing lower and pandemic other in businesses to share loss increase November first Series late in our as the half a an economy our Earth XXXX quarter highlight two in XXXX. global prior was the first substantial and our impacting factors quarter. and issuance generate Manitoba flow ability year during the Harvest of the in our loss preferred quarterly our to from A from our the cash expense Clean as compared from as of of the fees, CAD the slight increase cash a a prior the beginning of notwithstanding year, compared cash on impact flow

we earnings second subsidiaries. our a in The earnings expected second As for a our will challenging cash lower direct previously generation. quarter discussed, quarter flow have impact anticipate on

million and the payment preferred As during to acquisition capital and CODI Elias teams interest, reduce subsidiaries challenging at and cash $XX of today to and common have estimate Marucci, we $XX period. of balances and of preserve payments this the mentioned, time management totals recent the recent CapEx we distributions directed million. spend Subsequent between our share our

and approximately In on available $XXX our addition, liquidity. have revolver million we

flexibility they'll revolver and at need the term. of short and and financial just We our intermediate Pro Xx. liquidity leverage anticipate forma in companies acquisition will we our availability cash with for the the provide a Marucci, estimate that this over

we to ready investment should able dislocated market as this in provide our they subsidiaries the well opportunities move themselves. as support is sheet Our present need, balance compelling and on they strong stand and financial

second in the paid impact paid of June taxes of year our quarter the significant there half in and quarter of management of to as addition cash Earth produced XXXX. second year, first In divested it expected of CAD cash last amount a lower no fee Clean last flow, no in was the

comparing when Clean the half will of cash negative result, half a loss of As in Earth flow first produce the the XXXX of to XXXX, first comparisons CAD.

capital now to Turning expenditures.

During quarter of the prior expenditures incurred businesses a majority businesses. in spend compared XXXX, to we maintenance of million CapEx maintenance our capital our $X.X first year decrease period, existing $X.X million in related of of CapEx was to the across reduced the

Growth During the continue XXXX, to year and long-term growth February we capital CapEx $X.X objectives. to in quarter, of primarily the million. first primarily in invest $X.X growth quarter the million related spending January in quarter was prior X.XX's

seasonality investments half materially quarter of flow for our revenue timing Turning such have Further, or certain on of of and come and and acquisitions flow to the expectations absent timing divestitures, of operating certain a we cash the end. new vary earnings we can any the in our our factors the or of majority based year. shipments large XXXX, after and quarterly subsidiaries or orders to anticipate before cash in earnings our of made second as results

XXXX are guidance our year withdrawing mentioned, payout we full and range. Elias previous EBITDA As ratio

next are XXXX our unable then. extent many clarity facing, have we of are provide the earnings will call, year uncertainty a a on subsidiaries to full today. With range To a revised we the we revised our EBITDA provide range amount of

million CapEx previously For between year $XX the maintenance of of had estimated million CapEx, for full $XX spend XXXX. we and

for maintenance full for million estimate XXXX $XX Marucci is current $XX and between including of CapEx year million. Our the

of experiences For and this previously $XX to into to A million, is growth for across of $XX we first revised and half as the CapEx releases majority year between had estimated year systems the million CapEx between at in and for our pandemic of for growth channels. spend storefronts out X.XX. primarily full growth XXXX, IT million CapEx, however, $XX million $X builds their of the expected is prior the X.XX numerous consumer enhance spend entered expectation

X% of our decline. subsidiaries taxes, between payments taxes, we For companies, expectations certain taxable to XXXX total result in as a will spend our our expected the and expect were EBITDA tax however, X% of decline cash income on of cash cash at

for taxes. to Given an EBITDA our inability a unable year range full are also guidance XXXX, provide to cash provide we for range

with As on a provide call. revised next our to hope earnings EBITDA, range we

With will Elias. now call the lash turn to that over back I

Elias Sabo

briefly M&A activity Thank I to close forward like growth strategy. would and by you, discussing Ryan. our

on As positioned through a I side. to XXXX other earlier, Those mentioned us it we unexpected. emerge the steps have to make decisions the for crisis took as in and well stronger prepare this company

to We and our will continue storm. and and to to is approach hands-on disciplined us the set has portfolio believe apart ensure weather situated continue our well

taking meaningful are position We the deliver further deliberate come. to align interest with near-term us to actions better will which years value shareholders, to in

time, we subsidiaries on As place strategy group and through other we right but a moments in stronger other find of challenging in confident footing also team have excellent preserve that strong have side. we to the the are only and done

through more second the this As turmoil stronger believe and we the will managed expect we companies that be, valuable successfully to difficult forward. that be as quarter moving

to We highly strength in sheet they times. unusual have our operate as support balance these the companies

Our are gain companies, and respective our to share leaders their poised in share. niches market market additional

initiatives unavailable others to as to strength has the markets growth value acquiring debt We Our generate the to occurs premium we but opportunity pursue long-term to assures. by allowed best the highest-quality shareholder assets balance are market closed experiencing. currently us believe like dislocations during sheet all

select taking. the health our financial will with balance the the be and to balanced acquisition strength evaluating are company strategic While a capitalize and year of seek significant approach We ways time while portfolio. to constantly sheet we opportunities, enter we risk will different, will no enhance maintaining on best this over always to prioritize the

same forward. going the remains strategy Our

commitment operating intensely ESG proven are enhancing performance distributions shareholder disciplined We long-term creating the divesting, and sizable across executing to improving strategy, and our our companies, initiatives our portfolio, of acquisition our on opportunistically distributing focused value.

Q&A. please operator, lines open up that With for the


[Operator Instructions]

coming of first Our Kyle with from Jefferies. question Joseph the line

Your line now open. is


Hey, guys. alone by appreciate nine. environment Start starting guidance in tomorrow one good this the afternoon, company up we let saying

if much could. a give just So stores on for X.XX, to sales you dispersion stores I outlook on the of Can there. us sense breakdown sense and we appreciated reopening? best wanted us geographic for then the start store based and off of of the between give the online


Sure. Good afternoon, Kyle. This is Elias.

First, script you I sort would say combined between honest our with high we you've over retail to considering when condition. we two our running incredible year just ecom single and said think retail business the achievement is the and which in is and be of ecom as the up an last digits

stores to month little with XX% April. yet to on don't retail reopening, on dispersion than have a now are how we little right you. too in running early more anything share Our to will down tell date geographic trend, It's a so those

we quickly. happen states looking reopening at is as more are, reopening We occurring are we're

or we build that reopen are So slowly Texas think will inform and that like states the in stores us take looking California. more help Georgia and I at how

accumulating that to now, too right So early tell. we're data

consumer most the up. moved ecom has a really life unusual time encourages by in what product business demand time of our year-over-year ecom is to sites and closed the year-over-year is in and actually is arguably we've kind our for seen over that large consumer to and as what the result over X.XX's is XXX% up as retail our running so has Our us well

how So I how really is think brand strong this for it strong bodes this well brand emerge. will and


eligible the some did that any would and full I have That's PPP? read but here, Acts disclosure really every helpful. word Thanks series Cares haven't been you have of single for


that. to ask answer Yes. I'll Pat


slightly Yes. than ever the know or to if like company holistically taxes. be thing is -- has we you there make our it the just that. for you employee of you which is a could mean for because get company participated of only Relief payroll take do a we XXX act first so government to recovery some something couple with felt that sort is member the credit, it less was who's which in and in PPP. a meant some us Act was that to salary apply to initiatives The right or all real We in affiliation we the rules so not, in wasn't people they have family's family have I that are which sick companies our an weeks offset tax off of Coronavirus

seen it's I statements sparingly. on of sort used that numbers we've that very have sort we taken Recovery haven't Act used only where And the really that very, the have been that in. or of take if we will


Kyle, let that think, I to the companies backlash some just we're to that, and one public me point seeing have capital add taking access to plan PPP that are it.

to don't I think that that have was companies capital. designed more for held smaller, private access

power you and extremely up holding well. the our awesome a honest we Our feel is is earnings basis with of that on company to liquidity comparative be

that And and on payroll. designed us so people for that are to companies these correct we it it just wouldn't keep it's programs their to feel for apply morally need for that need

capital. we so adequate have And

be to resources through. make adequate able have it We to

Our five you well if honest had to than us really are asked be you with in weeks positioned companies our performing much expectations, ago. four better or

And so if we payments been we would don't morally that accept those feel it to eligible. right were have even


get everyone answer That's can a and think it. I behind great

spreads. versus Ryan liabilities balance potential then for given I'll wider facilities fixed have question you just movements given give the of opportunities of address in sheet, any funds. Obviously you're remind versus rate refi floating a with LIBOR sense your a us those and cost rates and Next, ask you floors on quarter, lower if can the and any


afternoon. Good Sure.

we zero; paid the rate, So year we as bond with only loans you our recall million debt which outstanding in at and XXXX, was was our the because of fixed term the our no revolver is entered instrument. sales had we really $XXX substantial floating off a had were rate

spread that is that on instrument. revolver plus the that down $XXX last we've on closed have a or week, took now today a for we So acquisition Marucci million LIBOR

floor today on XXX there that is agreement spread LIBOR and Our LIBOR today. that no is in

think very floating our rates we are today quite interest rate is variable, low. So

see don't we So a that today. helpful? refi reason Is to


That's look the the walk last deal acquisitions write when and in was volatility part, early everything us I can to commentary for And I through But did subsequent missed it. the of in call last Got your XX to Yes. some just over of flow pipeline days. equity market disruptions given market at trying call how terms you When here. potential but really the then April? recovery, then has great. pipeline down said started the the on in you on outlook volatility transition peaked really mid-March get



us sort M&A Kyle, and years financial just that virtue was first direct we over it broadly was highly gave is that was, that a guys wants by down this as coveted is and you This to view how markets a its and the on leg trending, acquisition dislocation. a of us the shutting think asset a result I and Marucci impact up. really So, it this market as of business being major to of came had business it a and fact performance see huge emphasize the and Covid

and the want of say whole unless illustrative how our that out is acquisition because use massive of mainly is a thing sort model today equities capital others the are they availability only advantage to finance So can because PE standalone zero. balance I now market right mere of to our debt sheet frozen really strength we of when permanent it has

really What would we would So course pipeline range is we robust. year this kind at say coming with of the and We of and pricing that said say into outside were pipeline transact. -- I in I the was be just our saw kept the is of saying robust. over XXXX willing to would in mid-March, pretty which

Starting XX get and it to had just industries desperate to working in we may that mid-March, is there's They gone companies pretty been some other the freeze to I figure where be the that's highly us M&A in to all have would a impacted and reached been that much out how we talking for on related they're time. days. trying side. to out activity are complete There say in last

M&A right markets I bit a think still spread. relatively large relatively now a out reopen, when large they're

to valuations V-shaped think that we'll dramatically, valuation that grips we reengaging will XX buyers on at I'll downside sort of would in much think recovery. the prices And valuation now be right that Kyle, with we come prices on our markets we our this say in more put reluctant of other I and come think, a pretty XX for we we sort unique re-engage good I think that with of now, the come one are make absolutely the are sellers a of on strategic back. assets time. And public see and come opportunistic. that that investors to get frankly sort could is that capital as price discovery provide need as anticipate asset I've upside reduction point, right of to are shareholders, so real more sticking heard to asset our days, highly we I up down in have change to, will in analysts really the next think meaningful new markets so but as back The are and dislocation side, people time

markets the I prices so also think private that we quickly or XX% point that had at in highest react don't and that recovered our most quickly, don't they fall something that losses experienced quickly. we've react back but don't March, of

like public markets the much perform so And trading but the who that par, to preferred where our back come our better who be still trading would ourselves are buyers back our the create to exist stock competing value arbitrage in our par, think seen private for come issuers and And term for and be creates sort able ideal markets. frozen of an to we're starts long condition active out towards in starting be we have us prices the our to securities, for the shareholders. that there's market and bonds of back; as back for above

we work we put let is that the that something cooling a the in. activity I waiting of think frankly with of to that economic look, issues prices we've and had me frankly just due absolutely need size been money this assets to asset given were are we reduced the the and start atrocious, the for. So balance wanted us it strength pandemic, inability health was our sheet of around what to None and find to but this

are hate And that think our the we for so much due down executing do although reason prices is very now. that beneficial are coming we asset strategy right health how to a it we pandemic,


the Lawrence from next of line with Securities. question CJS Solow coming Our

Your line is open.


the your obviously time, and this on I afternoon, sort and do strategy you hear been just I of since color maybe announced families rapidly you cable] [frankly to the too healthy and sort comp are and if your public you first [Indiscernible] the more you sort Marucci acquired, hope sort or can Maybe of year, think you guys companies is discussed the give acquisition. acquisition so brings what pretty close just what relatively table, the Good Good outlook, call you will. of to a obviously Great. with growing your voices of theme, of speaking sort guys. what post to help corona last the that little to hope think



product, of belief Pat of and the indeed those I in it kind heavy using I'll at that are So, I to sport Fox the guys as let seen did kind and fact along again say attributes the along companies sports notwithstanding we come so the a has broader so in example the for Marucci, is of here. top halo can part with most on people in would chip market this don't down that with it creates time Fox like of and warrior is say sports or winning our similar to right is terms that it we've of these start respect me much over looks temporary why exist don't company the baseball the a all that sort lifting then XXXX. come that would the ask history, that youth youth for assets Marucci and have moves aspirational over pause and for us that often. these all with Larry, of weekend now it for And ones our the are enthusiasm same dynamic that pull this with this which are into in Factory that the in often,

in with being I'll we So as pitch able that growth but see then what them. ask opportunities Pat? to indeed we them help how I'll Pat see is of on sort and start to


have just what and team or under have we've say entire has some Dave, We said obviously that company, a been leaders we think new that prior very Yes would And right are of that We and that both you I baseball else are last say thrilled a mean I years. introduced the strong for they're with can will products to gained markets a now. team management management as it's the there's internationally company through lot I introduce. tremendous add? great strong. think think the years be in friends and we that they here would participation lastly, strong over been a solid penetrated is isn't internationally following brand That well. there several I'd Covid.


authentic categories time it the starts direct some to you extensions international time over team. in the on in we of hit think white and things Joe in good management product I other see electives most attack but enthusiast of, kind brand, baseball it with space in great softball on take

authentic So the time lot brand. attack over with starting of white a space enthusiast to




no That's joke. So guess. though year X this a I CAD

switching is or home portside. the basically gears, XX% and is [Indiscernible] business heat And -- there's then the the remaining on the just clarify could so Sterno my Campbell of Just itself consumer right that's Rim is you that Sterno XX that


That’s roughly correct.


is is the many heat side the Campbell the zero consumer other obviously not going then side yes, okay, so really and Okay okay. doing


we foodservice tell is division in areas the totality we in rest of the of impacted. salad right? The some you of that's highly broadly outside some you. food of totality consumer can weakness one the the is talk and the obviously areas but we give with that's breakdown of everything strength the In service So business division to sort


it and want, term. just pretty we want workflow sure these lean is well the side you as to of last and where just it's slowing obviously kind of on subsidiaries sort cost-cutting up terms you long just operations can don't our so shift, thing do more keep run like with different is the you could yourself oiled for obviously again -- you a of I'm in guys I Okay and broad-brush agencies,

I stuff imagine the roll back have you can to. So, of when you most


the in careful so to try rapidly we parts case-by-case those that Liberty what now example surface would growth because we’re do and is be got and our right and not Larry, been, growing, got take a right it's of growing some businesses advanced like the pretty say, growing would out are I that Yes. Velocity, very we so opportunity. of unnecessarily lot well. And the costs of for it QX X.XX has portfolio have doing impact have been that Safe, is And really like to growing are we've to portfolio a growing.

but frankly business which that I layoffs, flat growing, emotionally parts us for from can it doing you or be would brought essential that travel things clearly do is getting furloughing runs and employees necessary to expenses pulled say are of would anything expenses down that the the there's the expect are cutting are hardest being them, easy nobody's the are marketing In and really not Those is it CapEx like gamut level. conferences. because back, to

to there's we a and saw unfolding is say now of growth we have that initiatives all we right to as quickly move I March in what quickly. So down. really skeptical very this GDP would companies that's instructed careful just real be cut very have be and we with If our likely

coming XX% how We careful like QX. I look. second going to or be quarter the consensus to really XX% in forecast in is to need think the all is

lot be don't now we decisive we times, cut understand market have able these be And want I because well not and market actions muscle of are on And one, unfortunately take let's number to customers therefore only want into to while perform our all and the frankly a via to these companies through think businesses but there's going take to that be exiting bankruptcies the service to down. backside. share closing able

mean happens that redistribute. market our their players and to life. remain typically will that's emerge the all are downturns the what downturn in And I is biggest of stronger this going share and

the as we put reminded to all our up back comes companies our and back to that So share back that as need we’ll to we able and economy some market inroad of all to spending us. back our as employees think we’ve and of put programs spool be naturally of

we to to cost in at tried attack the of I point a have so have take the maintain say, be position We across our where had spending least come portfolio, we have and to it to need development in would sales, marketing but and we're aggressive allow we R&D, that cost containment new everything because grabbers of are product outside mode. those in big will us think be things share here market that the

the the And financial we crisis. it's same ran playbook sort during when we of XXXX were in


with Todd Raymond Next of from coming question the line Robert James.

now Your open. line is


hope well. I Hi. doing Guys. everybody's

of were rough the follow-up I Just ended it looking a been? a there's obviously cost-cutting year that any need. can kind give is general context I just mean of seasonality well a you not cost-cutting, We and say to Larry's bit you I'm us counts, today? how we're of the headcount and for say step a as others, mean and company then us on by FTEs in in question company scale can significant to some where follow-up but little has give


probably more like terms kind rolling per millions be say containment to month would want Yes. we we than to little expect, if know would through. you expect in a to in cost bit that's what granular initiative into. dollar of Robert, get I we

to Sterno on FPE. we're X.XX has cost going that to is of and have of cuts pretty dollars prepared and say significant millions month, implemented as it's a some like so per kind millions really they've not So but

it's to employees is early it to furloughed of of laid off, I think Some little versus some so that. start too a disclose


enough. Fair

mean well chain X.XX looking as mean, some because overseas of said Liberty think the I supply chain I does ask in those doing as well, the businesses a doing you how's elements lot of as over orders quite couple areas. manufacturing to is this I quite I I mean Just disruptions obviously mean in at and some there. a I X.XX it, to supply mean

situation?? what's okay can that across inventory this the situations your go well situation in for selling mean areas -- remain in products chain are on go how businesses selling -- environment. inventory long your product disruption it this the many well supply I how are So and those that


It's down Bangladesh back are company up. date no I issues, I broadly comes geography So The but I geography. up by anonymous is it's went but say them mean is now China would now. right don't concern working there it's -- very by at started. geography our geography each say not biggest to team China well. want downtown there's our through but management goes

company. sourced team the management They've Our throughout company by multiple geographies in nimble. is

yet that there's more that that -- it's than right Robert. that we're worried now, of through worth So about went other far as we not issues were


Fair enough. Right.

fall have is -- the more leverage to obviously, you in much trailing and trailing. you you it at EBITDA revolver, the mean $XXX obviously $XX is cash the liquidity I call time EBITDA On million same million on improving. maybe of situation, available on X.Xx lower how going kind opportunity set but yes, the

could that -- you having pipeline up maybe about being be available to and talked the of pick You've being some share organic.

willing acquisitive. liquidity companies reserved, portfolio how additional support. an willing you be obviously that versus on leverage acquisition of obviously, How -- much be and could be in that would where case this need you take of a to to environment utilize in front would Some



then Robert high-level Ryan chip So ask I'll in. to also just I'll start and

frankly but to and coming hopefully denominator As of our better little me that times really even leverage increase two and over to you obviously now we I I correct It so beyond wrong. little because up come plan, would say is expected will we a than kind right would said guided down. a say improving the Ryan quarter feel and that undoubtedly second and going the leverage range good XX% XX% about tracking I'm that calculations we've think to I if and April's is in down

we think of the sort is still companies of the that test band below end we've we our publicly. stress that high leverage So when target our about talked

And so availability to be there. that some out provides

at and but go of our available are $XXX us so have million lending and In sort now a partners look I terms would option senior our revolver, excited $XXX open. the pretty leverage one million exercise liquidity, we on credit frankly, being upsize debt we providing a that. time our choose about markets wide right have as low-risk we to And we we of view capital like is it should of kind as to hope out

of yesterday XXX were think market bond I bond think and the our so our, we is on strong. trading as pretty I bond,

have allow we increase access we that amount the to would us us capital to need for covenant. think of obviously availability, market I the to but work leveraged within So our

high broadly three, acquisitive and now be to then be get range of we earnings as part six a willing better just think more and with bit from the up temporarily. desired our economy little and that could even bring bit the little potentially a I leverage kind of the above our months to us broadly in but not we of have a understanding we trajectory

all to in capital work But providers that? it you would our time. we with we would pretty deleveraging be quickly. because temporary add You believe are Ryan, what obviously markets the


Sure. Yes.

clarity Elias, I've with said, the some everything So add you've agreed numbers. a to of, lot to just

remarks as times. are total for of Marucci capacity We and forma two times debt a mentioned prepared five over we pro a reminder, covenant I as in have little Robert today the

comfortable -- the position even with even a have stress think we what if we test EBITDA those covenant in our and with okay. So extremely we declines we're expected

where our but to support will companies foremost, think of of prioritizing today, these through time. are a we've we One, because I this reiterate and first touched it's terms I important. couple it's In unprecedented liquidity on our

that even a is our emerge if our share should and talked common, of they about will in We and We we preferred market markets, stronger. greater share the they out our want to come market we they're they and prioritize ensure leader Number their on niche this, distributions companies if two there. includes get sure our liquidity want support allocation okay. financial our capital to use make which to have have

months the investing after now think been would first from satisfied Elias about have opportunistically. we to be said the and six as able will to in, Third, finding and three only second

markets, I of month for uncertainty six And to to given a in in three in in add-ons us our in today potential valuations thinking three of flow capital deal in likelihood about six cash period a substantially some large et streams, great terms the to that platform is is cetera. it's, this the in next finding think companies months existing near very uncertainty capital to term just low use intermediate the minds

I prioritize you decent thinking a liquidity how about think we really capital. about that that's So gives it, and we're hopefully framework how it our


mentioned since tracking Absolutely. slightly Elias, appreciate really got is April a than expected. I that then I yes and understood. color to ask follow-up you it better

one Is that say can that you a more Is doing any doing color there bit. is be a is -- So or thought there are better. about area? opened actually since that? something in on surprises that might can is weaker that that the you the particular business give even bit Any little door some there you good better you


weeks I some of of to outside honest. our appreciate I Robert, would the rollout being think gone Sure. this we across stay better looking doing what don't, human happen have And we've see business, up that And shut going economy viewed holding go majority are thought better thoughts at at cycle to us we was we've we respect a of our the but that's operate could as impact it is through go impacted I do business going have all started to that's substantially broadly every really and of just ever how imagine as seen see is this orders would think of i'll time, company so as mean you No. and you to encouraging. and be quite to not going I week companies. down to realm to that in think than it as board severely that probably it short by frankly scary how a been say dark the the company step what and all to back be say, we is, as our few doing to well thought home I I I is behavior with have the so and, and how minds our

now companies, everybody good follow bright their eight all with by within and nine really sort but and is do not much is -- own any it So of the so encouraged you we it. have we spot have portfolio holding up are pretty Pat, Marucci some


I'd to to people environment. a just deal expectations team management our great continue been are shown in and but add we them that nimble subsidiary are very had very know of of this with always great have they broadly performed fortunate level. and We broadly well very high perform skill well work at the and

of End Q&A


I'd the at for any And to further over like now questions Mr. time. back to this call I turn am remarks. Elias not conference closing Sabo showing

Elias Sabo

progress in for us in CODI. interest to your forward call. Thank again future. to continued like joining sharing We look the you. for our thank everyone on I'd today's And with you


does conclude and for our for participation. your that Ladies conference you today. gentlemen, Thank

now may You disconnect.